In this scheme, the bank asks you to invest a lump sum amount at one go, then on this amount you get a part of the principal amount, and interest on the decreasing principal amount.
If you are looking for such a medium for investment, where you can park your funds in one go and then get monthly returns on it, then SBI Annuity Deposit Scheme of the leading public sector bank State Bank of India can be the right option for you. In this scheme you are asked to invest a lump sum amount at one go, then on this amount you get a part of the principal amount, and interest on the decreasing principal amount.
SBI Annuity Deposit Scheme
You can invest in this scheme for 120 months. The minimum monthly annuity is Rs 1,000. Whereas, premature payment can be made on deposits up to Rs 15,00,000. There is no limit on what the deposit amount can be. The depositor gets the facility to take overdraft or loan up to 75% of the total annuity balance in some cases. In case of death of the depositor, premature payment can be made, on which there will be no limit.
How much is the interest? (SBI Annuity Deposit Scheme Interest Rate)
The interest rate on this scheme is the same as that received by the public and senior citizens on term deposits. SBI has recently increased the interest rate on its fixed deposits. Common investors are getting 6.1 percent interest and senior citizens are getting 6.9 percent interest. In this scheme, deposits can be made in four tenures, so different interest rates will be applicable on different tenures.
Is Annuity Deposit Scheme like FD?
No, annuity deposit scheme is different from fixed deposit. The depositor has to deposit money once in the FD account and gets the principal and interest after maturity (in case of STDR). In case of TDR, only the principal amount is received after maturity, interest is received at certain intervals.
Whereas, in annuity deposit you have to deposit in one go. And the bank will make repayment to you in the tenure decided by you. Along with this, there will be a part of the principal amount and interest. That means, on your one time payment, the bank will give you EMI every month, in which you will get a part of your principal amount and interest. Due to this, your principal amount will keep decreasing and by the time of maturity the amount will become zero.
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